Based upon Fashionmall's declaration of a dividend in the amount of $3.75 per share, payable August 1, 2002, Taubman expects to receive $3.1 million and an estimated residual value of at least $400,000. As a result, Taubman will recognize an approximately $2 million loss on its investment during the second quarter.

Taubman also expects to take a charge in the second quarter related to its investment in MerchantWired, LLC.

The principal shareholder of MerchantWired has informed the company that the sale of MerchantWired that was previously anticipated will not occur and that consequently MerchantWired will be discontinuing its operations. Taubman's investment in MerchantWired is approximately $6 million. This investment includes $4.1 million paid in the second quarter of 2002 to satisfy the guarantee of MerchantWired's obligations.

Taubman will assume ownership of equipment and related assets and is currently evaluating their potential uses and value. The two charges will affect net income, but not funds from operations, Taubman officials say.